Money ≠ Security

Weird title for a post on a finance blog about early retirement! I thought this entire thing was about how we should all accumulate a massive pile of money (25x our annual spending!), so we can never worry about anything ever again. Go happily off into the sunset leaving concerns behind us forever. Wrong. But wrong in a nuanced way that I’ll articulate below. It’s something I have struggled with for a very long time in my own relationship with money.

One night when I was a kid it was late and I couldn’t sleep. I heard my parents talking in hushed and worried tones in the kitchen. Quietly stealing down the stairs, I sat just out of view and listened to the oh so interesting things they were discussing. My dad had just lost his job. My mom, a teacher by profession, was staying home to raise my sister and me. They were talking about adult things – how would they pay the mortgage, how much did they have left in the checking account, would they still be able to afford the vacation that summer. I sat there, a little kid huddled on the step, half asleep, not entirely understanding what they were talking about, but sharing their fears. Those fears were repeated quite often when I was growing up; we were middle class, but tenuous middle class. We bought our clothes at the half price store, not because we were being frugal, but because we couldn’t afford much else. We took advantage of reduced price meals at school. A few missed paychecks here or there could spell disaster.

You’d expect the next paragraph to be about how this was an ever present force in my life, driving me to ever greater feats of frugality and savings. That it taught me the importance of having a big soft money pillow to land on if anything bad happened. It did do that, but it also taught me something far more insidious that I had to fight back against as my wife and I travel this path to independence.

I learned to pursue money. I learned to chase it with relish and zeal. And I learned to fear its absence. I never wanted to be trapped in the situation my parents found themselves. I followed investment and get rich blogs religiously. My undergrad major and eventual path to business school were premised on the idea that I needed to grab as much cash as possible as fast as possible. Lest I end up in the same hushed conversations late at night, making my kids worry in the same way. I learned to be terrified of a lack of money. The idea that I wouldn’t have enough of it ate at me. It was always a dark fear lurking in the shadows of my life. Influencing almost every decision.

Precisely what I learned that was so wrong was not that money = security, it was that MORE MONEY = MORE SECURITY! The bigger your pile of money to hide behind the more insulated you were against the cold winds of the world. If you can just pile up enough bales of cash you can banish danger from your life.

It turns out that’s wrong. Money doesn’t work that way. A lack of money can kill. It can destroy lives. If you haven’t read it, I highly encourage you to pick up a book called $2 a Day. It profiles just how bad life in America is for families living in extreme poverty. Mothers donating blood plasma to feed their children, children suffering from scurvy for lack of good food, kids ashamed to go to school because their clothes are literally falling off their bodies. For them, more money absolutely would equal security. It would banish hunger, fear, shame, and disease. But I’m not talking to them right now.

I’m talking to you, and most of us lead comfortable lives. You’re reading this on a computer, in a warm house, after a nice dinner, as you sit and watch Netflix on your 60″ plasma screen TV. For you and for me, we have passed any reasonable point of satiation. I needed to realize that whatever happens after my wife and I leave our jobs – MY FAMILY AND I WOULD BE FINE. 4% SWR or not. My wife and I were two highly educated, smart, driven people. We will be able to make money even if the worst happens and our investments crash. That little kid sitting on the steps is a bit older now, but my fears were still those of a child. I needed to grow up.

The fears that should assail me will not be held at bay by an ever-growing pile of cash. Money will not make our children courageous and good. Money will not make us happy. Money will not make our lives meaningful. And more money flowing to me will not make this world a better place. At this point in our lives, more money does not equal more security. And that’s one of the big reasons we’re giving up our jobs in a couple years. Security from these fears is not possible. They are not things to be banished by quick trick, a slight change to your way of thinking, or small change to your life. The only way to approach them is head on. Baying a great war cry as you charge headlong into the fray. We will not emerge unscathed, but I promise you that we will emerge stronger, better than we arrived.

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I talk to a lot of people and I have concluded that maybe everyone is weird about money in some way. I am a retired accountant so I love the subject of money. Lately, the behavioral aspects of spending and saving is interesting to me.

I have always paid attention to how much pleasure a purchase would give me and weighed that for each purchase. I love my iPhone and want good phone coverage so I don’t scrimp on my phone plan. I stay busy away from home so I have never had cable and can save there. So, I spend a lot of time and energy through the years making sure I am winning the money game.

I know lots of people that have always made less than me and will buy anything they fancy. They are financial wrecks. I used to think they were wrong to live that way and now I think that they may be the winners. They will have enjoyed all of their money and then some of the banks too. I am limited to just my money. The downside for them is that it is gut wrenching on the way down as they have to give back the car, home and toys when their finances make a correction. I have witnessed these correction and have not seen any behavior changes. They just don’t think of money in the same way. Maybe, they don’t value security. In the end, all of us will have lives whether we have money or not.

For me, having my kids changed how I looked at work just as it did for you. I then saw that if I was working, I was not with them. So, I decided that if I was working, it had to be for a good reason. I figured out what I made over daycare and that amount was applied to principal on the mortgage each month. When I did eventually quit working, I did not have guilt over leaving my husband with a big burden of supporting us.

This is why your blog appeals to me. My children are 29 and 26 so the realization that work was not everything was over 25 years ago. I have seen the benefits already. I did not have to crunch the numbers to see what we needed to live on because my husband wanted to work. I am always interested in strategies to maximize our nest egg as long as it does not effect my lifestyle too much.

For us its really about optimization. We don’t really intend to deprives ourselves at all, we just want to live as efficiently as possible. Just doing that dramatically reduces how much you spend. It was actually kind of surprising to us how much we just wasted every month.

Also there’s a great Atlantic article awhile back that really got into how weird people can be with money. It something were almost ashamed to talk about.

More critically I’d say flexibility and drive = security. Money only helps to a point, and it’s an important point to remember. Big thing is that we’re not doing this for money. If it was just about money we’d keep working till the day we died!

It feels as though we look to material things to feel safe; money is no exception. “Safety” is relative; and so having MORE of x doesn’t actually secure us of anything. The history books are full of very wealthy but unhappy and insecure people. Hubs and I are also on the track-back to a more simplified lifestyle, as you mentioned in several of your posts so far. Our story is similar in that we made more money, so we needed a bigger house, fancier car, you get the idea. More is not better in our opinion. Less is actually way more! Love your posts so far; best wishes in your quest.